Global Investment Returns Yearbook 2024 (2024)

New chapter: Corporate bonds and credit premium

Corporate bonds are a major asset class with an outstanding value of some USD 44 trillion, almost half that of the value of global equities. The return to a high interest rate environment has led many investors to re-consider the merits of corporate bond allocations. This new chapter is thus timely in presenting long run evidence on corporate bonds since the 1860s from both the US and UK. Even very high-quality corporate bonds have offered a significant credit risk premium. The premium from high-yield (or junk) bonds is appreciably higher. Yield spreads of corporate over government bonds incorporate this premium but are not a measure of the expected premium because they also encapsulate expected default losses. This special feature reports on default and recovery rates over the long haul and reviews the determinants of yield spreads and default rates. It presents evidence showing that corporate bonds are a distinct asset class. Finally, it examines whether factors can help boost corporate bond returns and provide positive premia.

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35 markets

The UBS Global Investment Returns Yearbook covers 35 markets and five composite indexes, i.e. the world, the world ex-US, Europe, developed markets and emerging markets. Twenty-three of the countries and all five composite indexes start in 1900. The other 12 markets start later than 1900, but have long histories ranging from 48 to 73 years. This chapter describes each of the markets and composite indexes, providing charts and tables summarizing the historical performance of stocks, bonds, bills, inflation and currencies.

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Dan Dowd, Head of Global Research & Evidence Lab at UBS Investment Bank,said: “Through the acquisition of Credit Suisse, we have created an organization that is stronger than ever before, and better positioned to deliver leading expertise and insights to even more clients. We’re incredibly proud to continue the collaboration with the professors and deliver a body of work that carries deep relevance for clients across the firm, helping them navigate the investment challenges and opportunities that 2024 presents.”

Mark Haefele, Chief Investment Officer at UBS Global Wealth Management, said: “The Global Investment Returns Yearbook is an authoritative guide to historic asset class performance, and it’s only by looking at the rise and fall of various asset classes over time that you can truly understand the importance of diversification and the full value of a disciplined asset allocation approach.”

Professor Paul Marsh at London Business School said: “As markets transition to more “normal” interest rates and levels of inflation, this is the time to reflect on what to expect for the future. The Yearbook provides the historical evidence and perspective needed to underpin future investment strategy.”